Ahn v.
Filed 7/18/12 Ahn v. Yao CA2/2
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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publication or ordered published for purposes of rule 8.1115
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
TWO
GRACE AHN et al.,
Plaintiffs and
Appellants,
v.
GEORGE YAO et al.,
Defendants and Appellants.
B223489
(Los Angeles
County
Super. Ct.
No. BC362109)
APPEAL from a judgment of the Superior
Court of
County.
J. Stephen Czuleger, Judge.
Affirmed in part; reversed in part and remanded to the trial court with
directions.
Masserman & Ducey, Mitchell F.
Ducey and Terri L. Masserman; Hollins Law, Kathleen Mary Kushi Carter, Tamara
M. Heathcote, and Christine R. Arnold, for Defendants and Appellants.
Law Offices of Joseph M. Kar,
Joseph M. Kar; Edward J. Horowitz; Law Offices of Christopher L. Campbell and
Christopher L. Campbell for Plaintiffs and Appellants.
___________________________
Fifteen tenants
California (the building) brought a complicated action against the owners of
the building, George Yao (Yao) and 4528 Colbath LLC (collectively defendants)
after defendants notified the tenants that the building units were going to be
sold as condominium units. Following a
lengthy, two-phase trial, judgment was entered in favor of plaintiffs. Defendants appealed the judgment, challenging
the damage award on the claims for wrongful eviction and negligence, penalties
award, injunction, and attorney fees and cost award. Plaintiffs cross-appealed, objecting to the
trial court’s orders (1) granting defendants’ motion for partial nonsuit, and
(2) denying them prejudgment interest.
We agree with defendants that the
trial court committed reversible error
in instructing the jury pursuant to Government Code section 66459. As the trial court found when it correctly
granted defendants’ motion for partial nonsuit, Government Code section 66459
does not apply. We further conclude that
the trial court erred in awarding civil penalties against defendants pursuant
to Civil Code section 1940.2 “by way of†Business and Professions Code section
11018.2. Finally, because the judgment
is reversed, the award for attorney fees and costs is reversed as well.
The trial court’s award of
restitution ($2,170) to Grace Ahn is affirmed.
In all other respects, the matter is remanded for further proceedings,
including a new trial.
FACTUAL AND PROCEDURAL BACKGROUND
Documents Filed in Connection with the Building
1.
Original owner gets approval of
the condominium project
On May 15, 1980, the original owner of the building applied
for approval of a tract map for building a 22-unit condominium. Final approval was given in 1984.
On February 28, 1985, a certificate of occupancy for a
22-unit apartment house
name="_ftnref2" title="">[2] was issued.
On June 21, 1985, the Department of Real Estate of the State
of California (DRE) issued a condominium final subdivision public report. That report was set to expire on June 20, 1990.
2.
Property is sold to the Huangs
In 1987,
the original owner sold the building to Peter Ming Shun Huang and Loretta
Nakagawa Huang (the Huangs). On March 26, 1991, they obtained from
the DRE a renewed/amended condominium final subdivision public report that was
set to expire on March 25, 1996.
Because the
building was developed as a 22-unit building but was improperly operating as a
23-unit building, on August 2, 2005,
the Huangs obtained a certificate of occupancy to convert the 23rd unit into a
residential unit.
3.
Huangs sell the building to
defendants
In 2005,
the Huangs sold the building to defendants.
On May 31,
2006, defendants submitted to the DRE a public report amendment/renewal
application. That application mistakenly
indicated that the building contained 22 units.
On October 10, 2006, defendants filed an amendment to the condominium
plan, confirming that the building contained 23 units. Three days later, the DRE issued a final
subdivision public report condominium conversion, indicating that the original
final public report had been issued on June 21, 1985, and that the
amended/renewed report was being issued on October 13, 2006, and would expire
on October 12, 2011.
Tenants’ Leases and Notifications of Proposed Sale
of Units
In the
meantime, plaintiffs signed leases and moved into various units in the
building. In addition to leases, some or
all of the plaintiffs executed documents acknowledging that the “premises
described†in their leases were “condominium†units.
On June 30,
2006, defendants sent plaintiffs a letter indicating that beginning July 2006,
their units were going to be sold as condominium units.
On October
26, 2006, plaintiffs’ counsel posted an advertisement, indicating that he was
preparing to file a class action against defendants and inviting interested
persons to contact him either to participate in the proposed class action or to
pursue an individual claim.
Plaintiffs’ Lawsuit is Commenced
In November
2006, plaintiffs filed their original
complaint. The third amended
complaint, which is the operative pleading, is convoluted and confusing; it
blends numerous claims into singular causes of action and repeatedly cites to
the specific statutes that plaintiffs claim were violated. As is relevant to this appeal, the third
amended complaint alleges the following against these defendants:
(1)
Declaratory relief. In this cause of action, plaintiffs allege
that an actual controversy exists between plaintiffs and defendants regarding
the validity of the acknowledgements and whether the building is an “apartment
house†or “condominium.†In support of
their claims, plaintiffs rely upon Government Code sections 66427.1, 66452.8,
and 66459; Los Angeles Municipal Code sections 12.95.2 and 47.06; and Civil
Code sections 1632, 1953, and 1962.
(2)
Rescission. In this cause of action, plaintiffs seek to
void each acknowledgement. Again, they
rely upon Civil Code sections 1632 and 1953.
(3)
Violation of Business and
Professions Code section 17200.
Plaintiffs allege that defendants violated Civil Code sections 1632,
1927, 1941, 1941.1, 1954, and 1962, Government Code sections 66427.1, 66452.8,
sections 12.95.2 and 47.06, among others.
(4)
Violation of Statute and/or
Ordinance. In count I of this cause
of action, plaintiffs allege that defendants violated Government Code sections
66427.1, 66452.8, and 66459; Civil Code sections 1632, 1953, and 1962; and Los
Angeles Municipal Code sections 12.95.2 and 47.06. In count II, they allege that defendants
violated Civil Code section 1940.2 by failing and/or refusing to comply with
various provisions of the Government Code, Civil Code, and Los Angeles
Municipal Code. In count III, plaintiffs
allege that defendants violated section 12.95.2 of the Los Angeles Municipal
Code. In count IV, plaintiffs allege
that defendants violated section 47.06 of the Los Angeles Municipal Code and
seek damages, including punitive damages for violation of various provisions of
the Government Code, Civil Code, and Los Angeles Municipal Code. In count V, plaintiffs allege that defendants
violated Civil Code section 1950.5.
(5)
Wrongful/Constructive/Retaliatory
Eviction. Plaintiffs allege
wrongful/constructive/retaliatory eviction based upon the same statutes
mentioned earlier.
(6)
Breach of the Implied Warranty of
Habitability.
(7)
Negligence.
Trial
Trial was
to occur in two phases. In phase I, the
jury would decide the claims for wrongful/constructive eviction, negligence,
and breach of the implied warranty of habitability. In phase II, the parties agreed that the
trial court would decide (1) whether
defendants violated Business and Professions Code section
17200 et seq., and (2) whether the building was governed by specified
“condominium conversion laws,†namely Government Code sections 66427.1, 66459,
and 66452; Business and Professions Code sections 11012 and 11018.2, and Los
Angeles Municipal Code sections 12.03, 12.95.2, and 47.06.
1.
Motions in limine
Prior to
trial, the parties filed a host of motions in limine. In particular, defendants filed motions to
exclude evidence relating to Los Angeles Municipal Code section 12.03 and
Government Code section 66459. Despite
an earlier ruling
title="">[4] denying plaintiffs’ motion for a preliminary
injunction on the grounds that the provisions of the Los Angeles Municipal Code
governing condominium conversions did not apply, the trial court denied these
motions.
2. Defendants’
motion for nonsuit
On December
2, 2009, after plaintiffs rested, defendants moved for a nonsuit arguing, in
part, that Government Code section 66459 did not apply. The trial court granted defendants’ motion in
part, finding that the building was not a residential conversion project.
3. Jury
instructions
Following
the presentation of evidence, the trial court charged the jury. As is relevant to the issues raised in this
appeal, the trial court gave the jury instruction No. 3300-6, which
instructed the jury regarding Government Code section 66459. Notably, the instruction only mentioned
subdivisions (a), (c), and (d) of that statute.
The trial court also gave instruction No. 16, a redacted
instruction regarding Civil Code section 1950.5.
4. Jury
verdict
The jury found defendants liable for negligence
plaintiffs different amounts of damages, totaling $136,400. That said, the damages for each plaintiff or
grouping of plaintiffs was not segregated; in other words, if a plaintiff
prevailed on both causes of action, the jury rendered one damage award. The jury found that defendants did not breach
the implied warranty of habitability.
5. Phase
II
Following
phase II of the trial, the trial court determined the condominium conversion
provisions of the Map Act and Government Code section 66459 did not apply. However, it awarded $66,000 in civil
penalties pursuant to Civil Code section 1940.2 “by way of†Business and
Professions Code section 11018.2. The
trial court also found that defendants violated Business and Professions Code
section 17200 and awarded Grace Ahn $2,170 in statutory damages ($1,085 doubled
pursuant to Civ. Code, § 1950.5, subd. (l))
and issued a permanent injunction ordering defendants to comply with Civil Code
section 1940.2 and Business and Professions Code section 11018.2.
Attorney Fees and Costs
Later, the
trial court determined that plaintiffs were the prevailing parties and awarded
them attorney fees in the amount of $803,573.75 (including a multiplier of
1.25) and costs in the amount of $62,246.89.
Appeal and Cross-appeal
Defendants
timely appealed, and plaintiffs timely filed a notice of cross-appeal.
DISCUSSION
I.
eviction and negligence causes of action must be reversed
As set
forth above, the jury awarded damages to each plaintiff in connection with the
wrongful eviction and negligence causes of action. Defendants contend that these awards in favor
of plaintiffs must be reversed because the trial court improperly instructed
the jury pursuant to Government Code section 66459. We agree that the trial court committed
prejudicial error in charging the jury pursuant to Government Code section 66459.
must be reversed and the matter remanded for a new trial, with proper jury
instructions.
A. Government Code section 66459 does not
apply
The parties
agree that Government Code section 66459 only applies to properties to be
converted from apartment houses to condominiums. Thus, in order to determine if the trial
court committed prejudicial error in instructing the jury in accordance with
that statute, we must determine whether the subject building was a condominium
conversion. Neither the Subdivision Map
Act (Gov. Code, § 66410 et seq.) or the Subdivided Lands Act (Bus. &
Prof. Code, § 11000 et seq.) defines what qualifies as a conversion project. For that answer, pursuant to Government Code
sections 66411 and 66412.3, we turn to the Los Angeles Municipal Code.
Los Angeles
Municipal Code section 12.03 defines a residential conversion project as “[a]n
existing apartment house, apartment hotel, hotel, multiple dwelling or group
dwelling used exclusively for residential purposes proposed for conversion to a
condominium, stock cooperative, or community apartment project to be used
exclusively for residential purposes through approval of a tract or parcel
map. For purposes of this definition,
the term ‘existing’ means that the building was constructed prior to 1945 or,
if it was built after 1945, a certificate of occupancy has been issued for the
building prior to the time of map application.â€
Here, the
subject building was built after 1945.
And, the certificate of occupancy for the building was issued in 1985
after the time of the map application and approval. It follows that the subject building was not
an “existing†building under the Los Angeles Municipal Code and therefore not a
condominium conversion. Government Code
section 66459, therefore, does not apply.
B. The trial court committed reversible error
in instructing the jury on Government Code section 66459
Having
determined that the building was not a condominium conversion, we next consider
whether the trial court committed prejudicial error in instructing the jury on
Government Code section 66459 when that statute did not apply.
“[T]here is
no rule of automatic reversal or ‘inherent’ prejudice applicable to any
category of civil instruction error, whether of commission or omission. A judgment may not be reversed for
instructional error in a civil case ‘unless, after an examination of the entire
cause, including the evidence, the court shall be of the opinion that the error
complained of has resulted in a miscarriage of justice.’ [Citation.]â€
(Soule v. General Motors Corp.
(1994) 8 Cal.4th 548, 580.)
“When
deciding whether an instructional error was prejudicial, ‘we must examine the
evidence, the arguments, and other factors to determine whether it is
reasonably probable that instructions allowing application of an erroneous
theory actually misled the jury.’
[Citation.] A ‘reasonable
probability’ in this context ‘does not mean more likely than not, but merely a
reasonable chance, more than an abstract possibility.’ [Citation.]â€
(Kinsman v. Unocal Corp.
(2005) 37 Cal.4th 659, 682, italics omitted.)
We conclude that the error was
prejudicial.
title="">[10] During his opening statement, plaintiffs’
counsel discussed condominium conversion laws, telling the jury that the judge
would instruct on the “basic law on condominium conversion.†Plaintiffs’ counsel also directed the jury’s
attention to the 90-day notice requirement contained in Government Code section
66459, subdivision (c), and informed the jurors that defendants did not give
the requisite amount of notice. In
short, plaintiffs’ counsel framed the case, in part, as one about an improper
conversion.
Later, during trial, plaintiffs
pressed the issue. For example,
plaintiffs’ counsel questioned Yao on whether the subject building was a
“conversion.†Particularly inflammatory
are the questions regarding whether Yao gave the tenants 90 days notice. After all, if 90 days notice is only required
if Government Code section 66459 applies, and that statute is inapplicable to
the facts of this case, then there was no reason for the jury to hear that Yao
did not provide such notice.
Plaintiffs’
testimony added to the error and confusion.
For example, Grace Ahn testified that she was never given a 90-day
notice of intention to sell or intention to convert. Similarly, Sami Kamjoo was allowed to testify
on notices of intent to convert based upon his internet search and his
interpretation as to when the 90-day notice period began to run.
Taken
together, we conclude that a different judgment was reasonably probable. Accordingly, we reverse the judgment for
plaintiffs and remand the matter for a new trial.
In urging
us to affirm, plaintiffs focus on the public report issued by the DRE in 1985
and the two renewed/amended public reports issued after ownership of the
building changed (original owner to the Huangs and then the Huangs to
defendants). We will not be misguided by
plaintiffs’ misdirection. Public reports
are relevant in terms of Business and Professions Code section 11018.2.
public reports has no bearing on whether the building was a condominium
conversion.
Plaintiffs
may be claiming that the negligence judgment is proper because defendants were
negligent by failing to comply with Business and Professions Code section
11018.2. We cannot agree for at least
two reasons. First, as set forth above, the trial court’s instruction on
Government Code section 66459 infected the jury verdict, compelling a new trial
without mention of this statute.
support plaintiffs’ apparent claim that there is a private right of action for
violation of Business and Professions Code section 11018.2. And, even if there were (perhaps through Bus.
& Prof. Code, § 17200), plaintiffs do not have standing “because their
claimed injury does not result from the alleged violation of†Business and
Professions Code section 11018.2. (
Cal.App.4th 1079, 1086.) Business and
Professions Code section 11018.2 was designed to protect prospective purchasers
(Handeland v. Department of Real Estate
(1976) 58 Cal.App.3d 513, 517–518), and there is no evidence that plaintiffs
were interested in purchasing their residential units.
II.
Penalties, Injunction, and Restitution
In Phase II
of the trial, the trial court found that defendants violated Civil Code section
1940.2, subdivision (a), “by way of†their violation of Business and Professions
Code section 11018.2 and awarded civil penalties against defendants in the
amount of $66,000. Assuming, without
deciding, that defendants violated Business and Professions Code section
11018.2, we agree with defendants that a violation of that statute cannot
constitute a violation of Civil Code section 1940.2.
Civil Code
section 1940.2 provides, in relevant part:
“(a) It is unlawful for a landlord to do any of the following for the
purpose of influencing a tenant to vacate a dwelling: [¶]
(1) Engage in conduct that violates subdivision (a) of Section 484 of
the Penal Code. [¶] (2) Engage in conduct that violates Section
518 of the Penal Code. [¶] (3) Use, or threaten to use, force, willful
threats, or menacing conduct constituting a course of conduct that interferes
with the tenant’s quiet enjoyment of the premises in violation of Section 1927
that would create an apprehension of harm in a reasonable
person. . . . [¶]
(4) Commit a significant and intentional violation of Section
1954.†The statute does not mention
Business and Professions Code section 11018.2.
(See, e.g., Action Apartment
Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1245, italics
added [“Legislation enacted in 2003 that prohibits a landlord from engaging in
a tenant to vacate a dwelling includes a similar savings clauseâ€].) And we were not directed to, and could not
locate, any legal authority to support the proposition that a violation of
Business and Professions Code section 11018.2 gives rise to a claim for
penalties under Civil Code section 1940.2.
Accordingly, we conclude that the trial court erred in awarding
penalties pursuant to Civil Code section 1940.2 by way of Business and
Professions Code section 11018.2.
Plaintiffs
assert that the judgment is proper because their claim under Civil Code section
1940.2 is based upon more than a violation of Business and Professions Code
section 11018.2. The problem for
plaintiffs is that that is not what the trial court found. The trial court’s finding is based
specifically upon Business and Professions Code section 11018.2. Because that finding is erroneous as a matter
of law, the judgment must be reversed and remanded for a new trial, based upon
alleged violations within the parameters enumerated in Civil Code section
1940.2.
It follows
that we reverse the trial court’s order granting injunctive relief. If, upon remand, the trial court determines
that an injunction is appropriate, at that time it may determine whether to
issue an injunction.
Finally,
defendants urge us to reverse the trial court’s restitution award to Grace Ahn
of $2,170. In support, they cite
evidence from their witnesses that they did in fact return the security deposit
to her and ask us to read into the jury’s award of $10,000 to her. Boiled down, defendants’ argument is
essentially a challenge to the evidence.
It is well-established that we do not reweigh the credibility of
witnesses. (Eidsmore v. RBB, Inc. (1994) 25 Cal.App.4th 189, 195.) In light of Grace Ahn’s testimony that she
never got her security deposit back, this portion of the judgment is affirmed.
If defendants are claiming that
this issue was actually given to the jury and that the trial court erred in
reaching it at all, we deem this contention abandoned as inadequately
briefed. (Cal. Rules of Court, rule
8.204(a)(1)(B); Hahn v. Diaz-Barba
(2011) 194 Cal.App.4th 1177, 1186, fn. 3.)
No legal authority is cited whatsoever in this portion of defendants’
opening brief.
III.
In light of
our conclusion that the matter must be reversed and remanded for a new trial,
it necessarily follows that the trial court’s award of attorney fees and costs
must be reversed as well. (
Cal.App.4th 1033, 1053; Merced County
Taxpayers’ Assn. v. Cardella (1990) 218 Cal.App.3d 396, 402.)
DISPOSITION
The restitution award in favor of Grace Ahn ($2,170) is
affirmed. In all other respects, the
judgment is reversed
and remanded for a new trial.
Defendants are entitled to costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
______________________________,
J.
ASHMANN-GERST
We concur:
_______________________________, P. J.
BOREN
_______________________________,
J.
DOI
TODD
tenants include Grace Ahn, Susan Ahn, Zareh Kevork Bagmossian, the Estate of
Eli Farkas, Marian Farkas, Pourandokit (Helen) Bibiyan, Faraydoon Kamjoo, Sima
Simino, Sami Kamjoo, Khalil Sayani, Flora Shadan-Sayani, Natalie Sayani,
Natasha Sayani, Aghahan Taban, and Maryam Taban (collectively plaintiffs). Most of the plaintiffs are elderly and
disabled.
documents are inconsistent—sometimes referring to the building as an apartment
building and sometimes referring to it as a condominium.
